A community electric aggregation program is an arrangement in which a city, township, or county negotiates an electricity supply rate on behalf of all eligible residents and small businesses in its jurisdiction, then enrolls those accounts under the resulting contract. The group’s combined purchasing power can produce supply rates that run roughly 15 to 20 percent below typical residential retail prices, though actual savings depend on market conditions and the specific contract terms. About a dozen states authorize these programs, and roughly 5.7 million customers were enrolled as of 2022.1U.S. EPA. Community Choice Aggregation
What Actually Changes on Your Bill
Only the supply portion of your electricity bill changes. The local utility still owns and maintains the poles, wires, transformers, and meters, still responds when the lights go out, and still sends you a single monthly bill. Those responsibilities are set by state regulators and don’t shift based on who supplies the electricity.
On that monthly bill, the supply line will show the aggregation supplier’s name and the negotiated per-kilowatt-hour rate instead of the utility’s standard supply charge. The delivery portion stays identical. There are no separate invoices from the aggregation supplier and no new account to manage. If a question about supply charges comes up, the supplier’s contact information will be on your opt-out notice or on the municipality’s energy portal.
Automatic Enrollment and the Opt-Out Notice
Most programs use an opt-out model. When a community launches aggregation, every eligible account is automatically enrolled unless you take affirmative steps to decline. That default enrollment is what gives the program its leverage: a large, predictable customer base is what suppliers compete hard to win.1U.S. EPA. Community Choice Aggregation
Before the program launches, every eligible account receives an opt-out notice by mail. This is the single most important document in the process, and tossing it unread is the most common mistake residents make. The notice spells out the chosen supplier’s name, the rate per kilowatt-hour, whether that rate is fixed or variable, and the contract length, which is typically one to three years.1U.S. EPA. Community Choice Aggregation
If you want to stay in the program, do nothing. Your account will switch to the new supplier automatically, usually within one to two billing cycles after the enrollment window closes.
If you want to decline, the notice will lay out your options. Most programs offer at least two or three methods: returning a pre-printed opt-out card by mail, calling a dedicated phone line, or visiting the municipality’s online energy portal. The notice includes your utility account number and any identification codes you’ll need. Opt-out windows vary by state. Some give 30 days from the postmark date; others use different timeframes. Whatever the deadline is, it will be printed on the notice. Miss it, and you’re typically enrolled for the remainder of the contract term, though you may still be able to leave later under different conditions.
How to Tell If the Rate Is Actually a Good Deal
To evaluate the offer, compare it against the “Price to Compare” on your current utility bill. That figure represents the supply-only portion of what the utility charges you per kilowatt-hour. It strips out delivery charges, which you’ll keep paying either way. If the aggregation rate is lower than your Price to Compare, you’ll likely save money. If it’s higher, you’ll pay more.
One detail trips people up: delivery charges are the same whether you’re in the aggregation or on default utility supply. Comparing the aggregation rate against your total bill per kilowatt-hour will make the offer look worse than it actually is. Only the supply line is being replaced, so only the supply line should be compared.
Keep in mind that the Price to Compare adjusts periodically as the utility updates its own procurement costs. A favorable comparison today doesn’t guarantee savings over the full contract term. Fixed-rate aggregation contracts give you cost certainty, which some residents value even when the starting rate isn’t dramatically lower.
Leaving the Program After You’re Enrolled
Most aggregation programs let you return to the default utility’s standard supply at any time without an early termination fee. This is one of the key consumer protections that sets aggregation apart from individually negotiated competitive supply contracts, where termination penalties are common. Some states have explicitly prohibited early termination fees for residential aggregation customers.
The transition back isn’t always instant. In some utility territories, customers who leave mid-cycle get placed on a variable rate for the rest of the current billing period, with the utility’s standard fixed rate kicking in at the start of the next rate period. Depending on where the market sits that month, the variable rate could be above or below what you had been paying.
When the aggregation contract reaches the end of its term, the municipality typically negotiates a new one. If it does, you’ll receive another opt-out notice for the new term. If the municipality doesn’t renew, enrolled accounts revert to default utility supply automatically. You don’t need to take any action to avoid a gap in service.
Renewable Energy Options
One of the strongest draws of aggregation is the ability to increase the renewable energy content of a community’s power supply. Many programs offer a tiered structure: a standard product with moderate renewable content that everyone gets by default, plus a greener product with a higher percentage of renewable electricity that residents can opt into for a small premium. Some communities have set their default product at 100 percent renewable energy, making clean power the path of least resistance for every resident.1U.S. EPA. Community Choice Aggregation
The premium for higher renewable content varies by market but is sometimes surprisingly small, because the aggregation’s bulk purchasing power applies to renewable energy certificates just as it does to conventional supply. In some cases, programs with higher renewable percentages still come in below the default utility rate.
Who May Not Be Eligible
Not every account inside the municipal boundary qualifies for automatic enrollment. Residents in certain low-income utility assistance programs, such as percentage-of-income payment plans, are typically excluded, because their rate structures are set by the utility commission and can’t be modified by a third-party supplier. If you receive low-income energy assistance, check with your program administrator before joining an aggregation.
Residents already receiving supply from a third-party supplier they chose on their own are also generally excluded. If you’ve already made an active choice in the competitive market, you won’t be swept into the aggregation. Large commercial and industrial accounts are excluded as well, because their loads are too large and too variable to fit a residential aggregation contract.
Budget billing is a separate wrinkle worth checking. Some utilities fold the new aggregation supply charges into your existing levelized plan without issue. Others exclude third-party supply charges from the levelized amount, so your monthly budget payment covers only the delivery portion while supply charges fluctuate. Before your account switches, call the utility and ask specifically whether their budget billing program accommodates aggregation supply charges.
Risks and Limits
Aggregation isn’t a guaranteed discount. The rate locked in at procurement reflects wholesale market conditions on that date. If wholesale prices drop significantly during the contract term, the utility’s default rate can fall below the aggregation rate, and participants end up paying more than non-participants. Fixed-rate contracts give you cost stability, but they also mean you don’t benefit when prices fall. This happened to a number of programs during periods of declining natural gas prices, and residents who hadn’t read their opt-out notices were surprised to find they were paying above-market rates.
Variable-rate aggregation contracts carry the opposite risk. Your supply rate moves with the market, so your bills become less predictable. Some municipalities choose variable rates when they expect the market to stay favorable, but the forecast doesn’t always hold.
Aggregation also only touches the supply side of your bill. If delivery charges rise, your total bill rises regardless of the aggregation rate. In many utility territories, delivery charges have been climbing steadily to fund infrastructure upgrades, which can offset some or all of the supply-side savings. Looking at supply charges alone can make the program look like it’s saving you more than it really is.